Wednesday, December 09, 2009

Betting on inflation

Despite protestations to the contrary, the recession continues. Among those who realize the fragility of our financial system, there is no doubt that the elites have failed to produce the sustained recovery which they insist is already upon us. Playing with numbers can only do so much; in the end, the people know a recession when they are living through it. GDP means nothing to the man who has lost his job, or the housewife trying to feed her family on a salary which is losing its purchasing power. It is a matter of when--not if--the people compel their leaders to dispense with the lying.

But there is another question which is arguably more important. Will the United States experience inflation of deflation in the coming months. Most of the Austrians are in the former camp, but there are other hard money types--Robert Prechter, for instance--who find the isolationist argument unconvincing. Of course, the neo-Keynesians fear deflation above all else, and Bernanke will do his best to inflate his way out of the latest mess. The question is whether or not he will be able to do so, or if he is pushing on a string.

I want to get to an argument in favor of an inflationary scenario in a bit, but it's probably worthwhile to explain why the question is being asked in the first place. It's strange that people who agree on many aspects of economics would disagree about which scenario may be soon upon us. But with a bit of explanation, it should become apparent why disagreement exists. For more information about the topics I briefly cover below, I highly recommend Chris Martenson's Crash Course.

Due to our fractional reserve banking system, every dollar deposited in a bank need not remain in that bank; much of it can be loaned out, even if it is a demand deposit. This is the "money multiplier", which ensures that the money in circulation is far greater than that which can be returned to creditors should they attempt to withdraw their money from the bank. There is much talk about solvency, but in reality all fractional reserve banks are insolvent. This isn't problematic so long as the economy is booming, but all banks are prone to runs during bust times. The FDIC exists to insure bank deposits, so as to prevent runs, but as the FDIC is itself bankrupt, the trouble remains.

Now, when the government bails out a bank, it does so in the hopes that the bank will begin to lend out the money, thereby generating another boom. In reality, the bank knows that it is already over-extended; that many of its mortgages, for instance, are drastically over-valued and will not be paid; and that the threat of a bank run is more real than ever. Thus, rather than lend out the additional money, they keep it as a reserve, to shore up the problems which are inevitable in fractional reserve banking. This is what the deflationists call pushing on a string; no matter how much money the Fed gives to the banks, the money will not cause inflation if it sits idly rather than being lent out.

Gary North is well aware of these arguments, but he points out that the Fed can still force banks to lend, thereby causing inflation:

The FED could get every banker in the country to pull back all excess reserves ($1 trillion these days) tomorrow and lend the money. It does not have to issue an edict. It does not have to take over the banks. All it has to do is charge 10% per annum on all excess reserves. Probably 1% would do the trick...

Just raise the price of not lending until banks are fully lent out.

This argument makes a good deal of sense. The question now becomes whether or not Bernanke is liable to take such a step. In the short run--that is, until it becomes untenable to maintain the fiction that the recession is behind us--he is unlikely to do so. But given Bernanke's belief that deflation is what turned an ordinary recession into the Great Depression, it is unlikely that he will be content to allow banks to refrain from lending. I might be missing something here, but North's argument seems to lend considerable strength to the inflationary case.

Monday, November 16, 2009

War weariness strikes the right

Prediction which rests on the assumption that recent trends will continue in perpetuity are often fallacious. For instance, while presently the political right is undeniably more likely to clamor for war, this has not always been the case. Indeed, as Justin Raimondo details in his book, Reclaiming the American Right, there is a long tradition of opposition to war by non-leftists. Today, the libertarians--led by Ron Paul--and many, though not all, of the paleo-conservatives-- exemplified by Pat Buchanan--have made principled stands against recent wars. Regrettably, most right-wingers have failed to follow these shining examples.

But if the wars continue for long enough under leftists, a backlash will eventually emerge. This opposition will not be as principled as those taken by members of the anti-war right, or rather, it will probably stem from different principles--though in many cases it will be purely pragmatic. But it will come. As Obama continues to dither over his decision as to how many troops he will send to Afghanistan, it is possible that we will see a swell of dissent, not from the left, which has been lamentably AWOL on the anti-war effort, but from the heretofore imperialist right.

Two cases present themselves, both courtesy of WorldNetDaily. Now, I frequently disagree with many of the columnists who write for WND, and while I appreciate their genuine journalism, a not insignificant number of their stories bear too close a resemblance to pieces in the Weekly World News for my taste. Nonetheless, they publish three of my favorite columnists, and they refuse to debase themselves in the manner of the sycophants of the mainstream press.

In any event, here are Pat Boone and Joseph Farah demanding the troops be brought home.

First Boone:

I want to emphasize that perhaps 75 percent of American Muslims don't necessarily approve of suicide bombings and jihadist activities – but it's in the nature of the religion and culture not to expose or repudiate the extremists. And so it grows. The problem is not just Islam; it's the jihadist ideology that has infected it.

And so, as a lifelong staunch conservative and active supporter of our brave military, I call loudly: BRING OUR TROOPS HOME – AND NOW!

You can't fight or change an ideology with guns or bombs; in some ways, you fuel and inspire it. These warped jihadists, like Maj. Hasan, are the reverse of God-fearing patriotic Americans. They have been brainwashed to believe that their concept of God will honor and reward them for killing as many innocent men, women and children as possible! We've never faced anything like this before. Never.

His insistence that we cannot "change an ideology with guns or bombs" is basically correct, assuming we refuse to go down the Roman route of enslaving everyone. Still, he misses something which actually helps his argument. Our very presence in the region has been cited by Osama Bin Laden as a reason for his jihad. Every time U.S. forces mistakenly bomb another wedding party, or accidentally kill a civilian, Bin Laden has an easier time finding recruits. This is not to say that merely leaving the region will dispel all hatred for the Great Satan. It's too late for that. But the longer we remain in the region, the further Bin Laden's poisonous ideology will spread.

Second, Farah:

I do not believe Barack Obama is capable of achieving anything remotely resembling victory in either Iraq or Afghanistan – at least not victory for the United States of America.

A president incapable of recognizing that war came home Nov. 5 at Fort Hood is certainly incapable of waging foreign wars.

A president incapable of recognizing that terrorists are among us could never be counted on to do the right thing in remote places like Afghanistan and Iraq.

A president whose own worst enemies are the Republican Party, Fox News Channel and the tea party movement couldn't possibly ever understand the nature of real combat.

It's time to bring the troops home now!

I understand, to an extent, Farah's anger. I have not seen any evidence that Obama is capable of making difficult decisions. He is a tolerably good--if wildly overrated--speaker, and he shows signs of political acuity--though these two have disappeared, or at least diminished in recent months. It may be argued that given the record of The Decider, the mere ability to make choices is not enough; we only profit if the decisions are good ones.

Anyway, Farah's mistake is in assuming that presidential leadership is capable of stealing victory from the jaws of defeat in that graveyard of empires. The reality is that it doesn't matter how many troops we send. Shooting jihadists is an achievable goal for the U.S. military. Building a civilization in the desert, with most of the population either opposed or indifferent to the endeavor, simply isn't a practicable goal.

Given that victory is impossible, it is absolutely imperative that Obama brings the troops home as soon as possible. Here's hoping this sentiment sweeps through the rest of the right.

Sunday, November 15, 2009

The Next Great Depression

Interest in economics appears to be inversely proportional to the strength of the economy. When wealth seems to be expanding—when houses can be bought, flipped, and resold quickly and at great profit, or when IPOs of Internet startups make everyone involved filthy rich—only contrarians and pessimists question the soundness of what is universally regarded as a good thing. But when the boom turns to bust, it becomes imperative to understand where things went wrong. Doe-eyed economists, who were as blind-sided by the downturn as those who foolishly followed them, scramble to retain credibility. Meanwhile, more skeptical commentators are provided with an opportunity to make their case against a system built on debt—at least until credit expansion brings about the next boom.

Vox Day is a self-described contrarian, whose prognostications of doubt about the health of the global financial system go back to at least 2002. In The Return of the Great Depression (RGD), Day cautions against “the consensus view that the economic contraction of the last eighteen months is essentially over.” This optimism fails to take into account the actual state of the economy, and is instead built on “definite hope.” He presents six economic scenarios for the coming decade which merit contemplation, ranked in order of decreasing likelihood to occur as follows: Great Depression 2.0, The Great Recession, Whiskey Zulu India or Hyperinflation, The Jobless Recovery, Fallout 4 Live or Doomsday, Saint Bernanke and the Greenshoots or Immaculate Recovery. His case for a second Great Depression is regrettably convincing, as are the ten reasons he gives as to why the current depression will be worse than the first.

RGD begins with a look at the Japanese recession of 1989, which is about to enter its second decade. The reason this recession is relevant for those trying to come to terms with our present economic crisis is that the actions taken by the Japanese Government in an attempt to stave off recession are disturbingly similar to those taken by the Bush and Obama administrations. “In nineteen years, neither monetary nor fiscal policy has managed to pull the Japanese economy out of the crater created by the Heisei boom.” The implementation of demonstrably inadequate policies portends a prolonged and painful recession for the U.S., and, indeed, much of the world.

For the most part, RGD is easy for the layman to follow. Some knowledge of economics would be useful, and is in fact provided by a helpful glossary of terms, but Day intends for his book to be read by “economic actors, not the economists who study them.” The sheer number of statistics and charts may prove overwhelming, but they also help illustrate one of the author's points. In attempting to accurately grasp the state of the economy: No One Know Anything. This doesn't make econometrics worthless, but it does mean that we need to be skeptical about facts and figures bandied about by talking heads—especially when these come courtesy of government bureaucrats.

To give just three examples from the book: Consumer Price Index (CPI), GDP, and unemployment figures are very unreliable. The formula used to compute CPI, which is used to determine inflation, was changed in the early 1990's. The new figure may understate inflation by as much as seven percent. GDP, too, possesses dubious utility as a statistical metric, since a decrease in imports causes the GDP to rise. Similarly, unemployment figures fail to take into account those who have ceased seeking employment. Paradoxically, a rise in unemployment may be seen as good news, since those who had given up looking for a job have resumed their searches, increasing unemployment numbers.

If Saint Bernanke and his fellow central bankers have actually ended the current recession, government intervention will see a boost of popular support, while the doomsayers, Day among them, will be justly ignored. On the other hand, if Day is correct, the coming depression presents an opportunity to diminish the role central bankers, bureaucrats, and politicians play in the economy. A freer, more prosperous world depends on radical adjustments to the structure of our economic system. Although the picture it paints is rather dark, RGD ultimately provides a useful blueprint for a better economic future.

Thursday, October 29, 2009

Cause for skepticism

We learn again, today, that the recession is over. I'm not buying just yet. The people exclaiming that the worst is behind us are, by and large, the same people who kept on insisting that a recession was impossible until almost the moment it was upon us. For instance, here's Congressman Ron Paul in his book End the Fed, talking with Federal Reserve Chairman Ben Bernanke on July 18, 2007, two weeks before the collapse of Bear Stearns:

Ron Paul: War, sometimes, is not healthy for a currency for keeping prices down, at least inflation. It's hard to find, in all of history, when war didn't create price inflation because, even in ancient times, countries resorted to clipping coins and diluting values or whatever... And yet, in the seventies, we had consequences of guns and butter. Now we're having guns and butter again (we're having consequences) and it just looks like we may come to a [stagflation situation as in] '79-'80. Do you anticipate that there is a possibility that we'll face a crisis of the dollar such as we had in '79 and 1980?

[At this point, Bernanke maintains that the Fed will maintain stable inflation--whatever that is--so Paul insists he answer the question.]

Ben Bernanke: I'm not anticipating a problem like '70-'80. (pp. 102-3)

Now, it is presently too early to tell whether or not we will see stagflation again, though it remains a possibility. The salient point is that Bernanke could not conceive how such a situation could come about under his reign. Quite obviously, the central bankers didn't have things under control, or they would have been able to steer us past this crisis. There is an argument that they have in fact done so, which we'll get to in a bit; what's inarguable is that they botched things this time around.

I should also add that while I don't think anyone can steer around economic crises by injecting credit into the economy since this is the precise mechanism which causes crises, I take it for granted that the central bankers do believe such a thing is possible. If you're keeping track at home, this means that on the side of possibilities we have an end to the boom-bust cycle, and on the side of impossibilities we have the reemergence of a phenomenon which came into existence as little as thirty years ago.

No one will deny that the crisis caught Bernanke, as well as most mainstream economists, completely unaware. Notes to the meetings at which bankers set monetary policy may be safely hidden (End the Fed, pp. 95-9)--for the good of the people of course--but, until the State finds a way to control it, the Internet provides a record for posterity. One might think, then, that the false prophets who insisted that everything would go on swimmingly--forever--would be ignored. And, in fact, some of them have been regulated to the dustbin of history; but it remains quite advantageous to be optimistic, even over something which one knows nothing about--at least when it comes to the economy.

Perhaps this is merely human nature. We gawk at car accidents; but only if we're not participants. We want to believe that things are getting better, yet this alone is not evidence that things are, in fact, improving. We may hope that the optimists are right. But the pronouncements of those who insist that the worst is behind us, and that the recession is now over, should be met with the same caution which should have greeted those who insisted, scarcely more than a year ago, that the good times would roll on forever.

Tuesday, October 27, 2009

Endless war

The number of times in which the accepted wisdom differs from the actual facts is not insignificant. This is especially true when it comes to the realm of politics. To give but one example: it is widely bemoaned that Republicans wish to turn back the clock on abortion, forcing reluctant mothers into alleyways to destroy their progeny. In point of fact, very few Republicans care one iota for abortion, as evidenced by their paltry record in curtailing, however slightly, this barbaric practice.

A similar illusion exists when it comes to war. In the minds of most, the Right wages war, while the Left opposes them. Of course, this doesn't comport with the historical data: most wars have been started by Democrats. But setting aside the American paucity of memory, we cannot even be relied upon to stay focused on the narrative long enough to realize that it is a lie. For though we have elected a Democrat, the wars continue.

Setting aside all of the ridiculous non-wars which nonetheless share that appellation, we are presently fighting two. The first, according to the narrative, was the "necessary war" in Afghanistan. The second, the "unnecessary" one, is in Iraq. Following his election, Obama insisted that we would withdraw from Iraq by 2011. But as with his predecessors "mission accomplished", there is more than a little hyperbole in the assertion. 50,000 troops will remain even then, so Iraq will be occupied long after the war is officially over. Sort of like Germany, or Japan, or South Korea, or...

Meanwhile, despite the deadliest month of fighting in Afghanistan since we first invaded, we're still mired in a war which cannot be won. Worse, Obama continues to waver over whether or not he will send more troops to die in the region. I say this not because I support such a measure, but because if you seriously believe the war can be won, you have to take the necessary measures to achieve victory. It's hard to escape the conclusion that Obama is content to allow the war to continue endlessly as long as it doesn't hurt him politically.

(In this vein, I fully expect him to compromise by sending enough troops to the region for his supporters to claim he's working toward victory, while his detractors can insist he's not supporting the troops--but we'll see.)

What's extraordinary to me about this is not the betrayal the more principled, if naive, Obama supporters are bewailing. After all, anyone who was paying attention knew that if Obama was less likely to bomb Iran than was McCain, he was not at all likely to do anything about either of our wars. Instead, what I find amazing is how the narrative hasn't changed. The Democrats are still seen as the pacifists. Would that they were! The wars might actually end.

I wish I could say I see a way out. Alas, so long as otherwise sensible opponents of war are not a threat to go against Obama, he will be able to keep the wars going. After all, antiwar democrats aren't going to vote for the other guy--whoever he is. So Obama gets to act as if he's tough on terror for the affordable price of a hundred or so dead soldiers a month. Is this a great country or what?

Tuesday, September 22, 2009

Meaningful Meditations

I picked up The Quest for God based on the endorsement—if we may stretch the term to call it that—which the imperturbably irreligious John Derbyshire gave it in one of his pieces for National Review: "I am tempted to say that any believers out there who feel like writing a book of apologetics should imitate P.J.’s approach, if they want to make any impression on the unbelieving reader." Since apologetic tracts seem to have lamentably little influence on those whom they were written to convince, when a casual visitor doesn't run out shrieking in the midst of all the preaching to the choir, the preacher merits further investigation.

In contrast to some of his more opinionated works—Intellectuals, for instance—The Quest for God is largely respectful and even-handed. This is not to say that Johnson avoids the difficulties inherent in a meditation on tricky theological issues, either by avoiding them altogether, or by pretending that they do not exist. Instead, he freely admits that the most important areas of belief are usually those most shrouded in mystery, and confesses his own ignorance and uncertainty. "We may not be able to being to understand God. We may not even be able to believe in him."

While admitting that he wants all to experience the riches of Catholicism, Johnson admits: "I never proselytize, as such... I want to help -I do help when asked or when it is clear my help is needed and will be useful. But I also confess my own woeful ignorance and shortcomings and uncertainties." This is a good approach to take. Our attempts to provide spiritual assistance may be well-intended, but they are not always appreciated. Instead of attempting to cajole reluctant converts, Johnson provides useful thoughts for anyone who is concerned with the questions which vex us all, while also giving incite into the mind of an intelligent believer.

Unfortunately, the book is not exactly orthodox: "Not only do I think there is salvation outside my church; I also think that, for some people, salvation is more likely outside my church - in other churches or no church." Since few people would turn to Johnson for theological certitude, fellow Catholics shouldn't be too bothered with this passage—see instead CCC 816. Of greater concern: one wonders why anyone would become a Catholic if salvation can be had without bothering with all that awful church business. It is a tricky balance to maintain: charitably interpreting the more difficult aspects of Christianity while insisting that truth is nonnegotiable. For the most part, Johnson achieves this by adequately exploring each issue he examines. Death, heaven, hell, purgatory: they're all here--and much more besides.

The closing chapter on prayer he calls "the most important". Although he does not cite Pascal in this context, Johnson maintains that all can and should pray; since our belief in God ultimately has no bearing on whether or not he exists, it is prudent for everyone to do so. This holds even for the agnostic or atheist: "In a way, the prayer for faith is the purest form of prayer." If God exists, and he is at all concerned with human beings, he cannot help but assist those who implore his help. This is why prayer is "the one thing I have found in life that never fails completely."

The Quest for God was enlightening and edifying—as most of Johnson's books are—and it draws one's attention away from worldly things to that which really matters, if only for a brief while. That is the merit of books of this type. There are better reflections out there, but Paul Johnson has contributed a worthy addition.

The welfare state

Iamyouasheisme has been kind enough to respond to my recent post in which I attempted to use the thought of Ludwig von Mises to expose some of the flaws in the neo-Keynesianism of Paul Krugman, as well as the Monetarist approach to which the latter rightly objects. I made some quick replies, but I believe the criticism is substantial enough that it is worthy of more substance and length than I gave it.

He writes:

Everything I have heard or read of libertarian economics seems to require - even if it is not acknowledged - a retreat from bigness. Not just in government, but in business.

This appeals to anarchists, populists, back-to-nature hippies, and right wing libertarian types, but not to most people. Call them suckers, but they know what they want. What they really want is the welfare state, without having to pay for it.

First, he is completely correct in that libertariansim requires--I quite like the phrase--"a retreat from bigness". Whatever term we use for the current economic system, it is categorized by bigness. Sure, both parties offer occasional paeans to the small businessman, but the system is designed so that corporations with lobbyists benefit to the exclusion of actual entrepreneurs. There is some virtue in bigness; there are valid arguments against Wal-Mart, but it manages to provide cheap goods for the consumer. At the same time, any large entity will move sluggishly to adapt to the consumer's changing needs. Libertarian theory envisions a system in which small entities react readily to meet these needs.

I think there is a strong argument that can be made for smallness, especially in business. This was a main component of the distributist theory of Belloc and Chesterton. And while we ought not pretend that there is a silent libertarian majority out there somewhere, I think there is an urge for smaller things by many people across the political spectrum. Still, it is apparent that most people are comfortable with the Welfare State, especially if they don't have to pay for it.

It is also true that libertarians tend to assume that the welfare state is much worse than it is. Certainly, one who believes in the free exchange of goods and services on the market, both because it doesn't involve a violation of rights, but also because it tends to increase wealth for all members of society, will be reluctant to endorse the welfare state. Still, the current system is far better than the socialist regime, in which, as Rothbard puts it, the market is violently abolished, and in which a board of advisers must attempt to perform economic calculation in the dark, to the detriment of all its subjects. It is telling that while Ron Paul would readily have abolished most departments of the Federal Government, the majority of his rhetoric was devoted to attacks on the Empire and the Federal Reserve. Returning welfare to the market was much less of a priority.

Charles Murray, a very thoughtful libertarian, explains well the workings of the welfare state:

[T]he European model has worked in many ways. I am delighted when I get a chance to go to Stockholm or Amsterdam, not to mention Rome or Paris. When I get there, the people don't seem to be groaning under the yoke of an evil system. Quite the contrary. There's a lot to like--a lot to love--about day-to-day life in Europe, something that should be kept in mind when I get to some less complimentary observations.

Murray recognizes that it is an exaggeration to suggest that the welfare state does not work. It is plainly false, and thus undermines the good in libertarian theory, in the same way our more paranoid and conspiratorial members give us a bad name. I've been careless on this point; while my critiques have tended to focus on the long run, in the end, unless a fundamental contradiction can be exposed in the system as it exists, such that long run stability is impossible, insisting that a system will not be permanent is merely a trite truism. Of course the United States will not last forever. Nothing does. What must be done is locate the problems with the welfare state and explain how a libertarian system would be preferable.

Let us return to Murray's talk. He draws on Madison's Federalist 62 to argue that: "A good government implies two things: first, fidelity to the object of government, which is the happiness of the people; secondly, a knowledge of the means by which that object can be best attained." Murray argues that Madison is speaking here in an Aristotelian sense. In other words, we are speaking of eudaimonia.

He tries to sketch some framework for this happiness:

To become a source of deep satisfaction, a human activity has to meet some stringent requirements. It has to have been important (we don't get deep satisfaction from trivial things). You have to have put a lot of effort into it (hence the cliché "nothing worth having comes easily"). And you have to have been responsible for the consequences.

He goes on to note that there are four institutions which provide this framework:

family, community, vocation, and faith. Two clarifications: "Community" can embrace people who are scattered geographically. "Vocation" can include avocations or causes.

The critique of the welfare state, then, is that it significantly narrows this framework, and actually encourages its citizens to avoid the human activities which lead to deep satisfaction. To use one of his examples: although it is profoundly challenging, being a parent is rewarding. Yet parenting is precisely the sort of thing the citizens of Europe are no longer doing, and they are avoiding it because the welfare state no longer places a priority on parenting. Absent strong encouragement from the institutions Murray mentions--or discouragement to duck one's responsibility--there is evidently little reason to become a parent, and certainly even less to have a large family.

It is not that Europeans hate children, nor is it that the government doesn't want them. On the contrary, in many European nations one can be paid for having children. For a time, declining birth rates were greeted with approbation, but this has changed. The welfare system will have to be rolled back unless more workers are found to perpetuate the system. In lieu of European babies, immigrants have been imported from Africa and the Middle East. Setting aside any commentary on the prospects of substantially different cultures living in harmony, this method too seems destined for failure. Immigrants have been quick to realize the good in the welfare state without contributing as meaningfully to the number of workers as was expected.

Now, we might argue that being a parent is its own reward, and that people should have children regardless of government policies. In fact, this is my own position. But it appears to be no more popular than libertarianism, as falling birth rates attest. The welfare state is able to provide for the poor; and although this is not my position, it may even do so better than the free market ever could. However, it is incapable of fostering the institutions necessary to the well-being of man. It provides a comfortable material minimum beneath which the lowliest citizens shall not be permitted to slip. Meanwhile, it enervates the human spirit.

The progressives who agitated for the welfare state were no doubt filled with good intentions. Some were truly revolutionary, and wished to replace institutions like the family. But others merely sought to use government to buttress them. What we have found in our decades of social experiments is that this is not the way things work. Attempting to help single mothers provides a disincentive to form families. It may be laudable that single mothers are no longer social pariahs. But concomitant with the acceptance of single motherhood as a viable alternative to married life has been the undermining of marriage. The neglected ghettos of our inner-cities are resplendent with children who can usually eat, thanks to our welfare system, but whose family life is insufficient to provide them the means to live happily. If the State can take credit for providing the food, it also deserves blame for destroying the family.

I said earlier that we learned that the State cannot easily buttress institutions, but what I should have said is that we ought to have learned. There are thoughtful advocates of the welfare state, but many of them seem to ignore the great shortcomings of such a system. It is not enough to insist that welfare policies will have no deleterious effects on the family when we now know that they do. These effects may be a price we are willing to pay, but they must be considered as part of the equation.

Lest I be seen as a mere critic, I will briefly offer some suggestions for a way out, though I am not optimistic that we will take it.

There are two things that must be done to revitalize our way of life. First, we must reduce the size and scope of Government. This is politically impracticable, but it is necessary if we do not wish to lapse into anemia. If the rise of the State reduced the efficacy of essential institutions, reduction of the former will provide much needed breathing room for the latter. This is not to say that the family would be honored the instant welfare is ended. As it is far easier to let an institution decay than to build it up again, I think it highly likely that, at least during an indeterminable transition period, things will look dark indeed. But the State must be reduced if our institutions are to thrive.

Second, those of us who reject the welfare state must do everything we can to foster the institutions which the State has undermined. The early Christians built a community in the rotting carcass of Rome. When Rome at last fell, civilization did not stop; the torch was passed on. There is no reason we cannot begin to build as well.

Monday, September 14, 2009

Back to Keynes

Paul Krugman is at it again. His column asks a good question: How Did Economists Get It So Wrong? Alas, rather than run to one of the economists who actually got it right, Krugman finds another way to offer a paean to Lord Keynes. It's getting so mind-numbingly predictable that Jeffrey Tucker of Mises economics blog has simply thrown up his hands at Krugman's latest drivel.

I have neither the time nor the inclination to produce a complete take down here, but I want to highlight a couple of problems with this piece. Essentially, Krugman divides economists into two camps: freshwater and saltwater. The former are variously described as monetarists, adherents of Milton Friedman's Chicago school, and "neoclassical purists"; they believe that the market should be trusted, but that a central bank should be used to inject liquidity into a lagging economy by lowering the interest rate. The latter are New Keynesian, and believe that in addition to manipulating the interest rate, Government should also augment unemployment by increased spending. Obviously Krugman is a member of the later camp.

The thrust of his argument is leveled at those who believe that markets are infallibly rational: "But the New Keynesian models that have come to dominate teaching and research assume that people are perfectly rational and financial markets are perfectly efficient." This is apparently the explanation for the economic crisis.

His dichotomy allows him to insist that the freshwater economists are the champions of the free market. Moreover, freshwater theories failed to predict the current problem and are powerless to reverse the current recession. This is because one cannot raise interest rates below zero, and, as Krugman avers, "But zero, it turned out, isn’t low enough to end this recession."--which is true from a monetarist perspective. The implication seems to be that, unregulated capitalism having failed, we can now turn to government stimulus to end the current recession.

However, he fails to note that there is another school of economic thought, namely the Austrian, which rejects both freshwater and saltwater assumptions, and whose theories predicted the current crisis. The difference between libertarian philosophy and Krugman's Big Government are sufficiently obvious, but there is a considerable chasm between Friedman and the Austrians as well, which Murray Rothbard explains here:

[W]e must recognize that this "purely monetarist" approach is almost the exact reverse of the sound – as well as truly free-market – Austrian view. For while the Austrians hold that [Benjamin] Strong’s monetary expansion made a later 1929 crash inevitable, Fisher-Friedman believe that all the Fed needed to do was to pump more money in to offset any recession. Believing that there is no causal influence running from boom to bust, believing in the simplistic "Dance of the Dollar" theory, the Chicagoites simply want government to manipulate that dance, specifically to increase the money supply to offset recession.

It is difficult to see how the market can be seen as free if the State can at anytime create money out of thin air. In fact, Austrians see this as the very cause of the business cycle. I've covered this at least briefly in my review of Meltdown, so I'll not return to it here. Suffice it to say that, however small its number of adherents, and however marginalized its members, the Austrian school did see this coming. For that reason alone, their theories require our attention, if not our allegiance.

Returning to the piece in question, Krugman writes: "To get anything like the current slump into their models, New Keynesians are forced to introduce some kind of fudge factor that for reasons unspecified temporarily depresses private spending. (I’ve done exactly that in some of my own work.) And if the analysis of where we are now rests on this fudge factor, how much confidence can we have in the models’ predictions about where we are going?"

He's absolutely right that the models are flawed, but the solution isn't to introduce a fudge factor: the models should be scrapped altogether. As Ludwig von Mises pointed out long ago, economics is a science, but it is a qualitative one, not a quantitative one. We can derive general trends from economics, but we cannot make any reliable quantitative predictions. Thus we know that unemployment will increase if the minimum wage is raised beyond that which the market can support, but we are powerless to assert how much unemployment will be created, or in what sectors of the economy. As Mises writes in Human Action:

There are, in the field of economics, no constant relations, and consequently no measurement is possible. If a statistician determines that a rise of 10 per cent in the supply of potatoes in Atlantis at a definite time was followed by a fall of 8 per cent in the price, he does not establish anything about what happened or may happen with a change in the supply of potatoes in another country or at another time. He has not “measured” the “elasticity of demand” of potatoes. He has established a unique and individual historical fact. (pp. 55-6)

And again:

The [mathematical economists] devote all their efforts to describing, in mathematical symbols, various “equilibria,” that is, states of rest and the absence of action. They deal with equilibrium as if it were a real entity and not a limiting notion, a mere mental tool. What they are doing is vain playing with mathematical symbols, a pastime not suited to convey any knowledge. (p. 251)

Whatever the criticisms of Mises, it cannot be argued that he was unaware of a reliance upon economic models.

Krugman naturally advises a return to Keynes, but he seems oblivious to the reasons his favorite economist fell out of favor with those of his profession. Given the implications of Keynesian theory--spend as much as you want, at least during a recession--there is no reason the State would ever dismiss him if they weren't absolutely required to do so. Indeed, whatever the actual economic ideas upon which are elected leaders draw, they champion something of an implicit Keynesianism.

I haven't the time to go into this here, but the stagflation of the 1970's did significant damage to Keynesian orthodoxy. When your theory says that something can't happen, and then it does, it's time to change the theory. Given the inadequacies of the monetarist position, it's not surprising that Keynes is back in vogue. But Krugman would do well to realize the tenuousness of his own position. If Keynes has failed before, he can fail again. Perhaps this time we will realize that there is another game in town.

Saturday, September 12, 2009

Reflections on the right

The beast, she wakes. I suppose a libertarian should support anyone who opposes a growth in government, but it's hard to root for the right because it is so impossible to take them seriously. During the Bush years, the deficit was allowed to balloon without the slightest peep of protest from the ostensible champions of limited government. After all, Bush was one of them. He had cut taxes, the surefire panacea for all that ails the right, and an especially useful mechanism if one wishes to war with everyone with the help of the country's credit card.

That bills must eventually be paid apparently escapes the right, for whom monetary policy is a matter of absolutely no interest. Blame is placed on those who raise taxes in an attempt to close our ever-growing budget deficit. It should instead be placed on those who ran up such egregious deficits in the first place.

But the Left, it will be said, spends even more than the Right. Lamentably, it is true. Less than a year into the his presidency, as Pat Buchanan avers, "Obama is making that Great Society Republican president [Bush II] look like Ron Paul." But, as I evidently never tire of saying, that the Left is wrong does not make their opponents correct. It is preposterous to insist that John McCain, who stopped his campaign to bailout the banks, or George W. Bush, who oversaw a larger increase in non-defense discretionary spending than did Clinton, or any other Republican for that matter, would somehow govern in a fiscally responsible manner. There is simply no evidence that any GOP leader since Coolidge is capable of reducing government spending.

On the other hand, the Republicans do present, if not an actual obstacle, at least a cacophony of loudmouths, to the ever-growing leviathan. But this, more than anything, demonstrates the absurdity of the modern conservative movement. The only thing they are even reasonably effective at doing is slowing down the rate at which the Democrats expand State control. This is a good thing, but it cannot be the only thing. Once a program has been put in place, the Republicans do not even try to end it. They seldom even talk about it. Often, they expand it.

Just once, I would like to see a mainstream Republican--Ron Paul does not count, alas--or a conservative commentator advocate the complete dissolution of a Federal Department. I'm not in the least particular as to which one goes: Education, Labor, Energy, Homeland Security, Agriculture--few, if any, have merit. For goodness sake, look at this list of agencies. I cannot fathom how it can be so difficult to insist that a few overpaid bureaucrats get real jobs. On the other hand, being bureaucrats, they may not have any actual skills, so we may need to train them.

Obama has been an unmitigated disaster. It's not even one year in, and he's already run up the largest deficit in history. In his defense, he has two losing wars which are eating up a large portion of the budget, but which he cannot end, for reasons of cowardice. This is not to say that I envy the man his position, or fail to appreciate the difficulty of the decision. On the other hand, it's hard to empathize with someone who refuses to end a war, so costly in blood and treasure, because it would be politically inexpedient to do so.

The vicissitudes of politics being what they are, the Republicans may be poised to regain power at some later date. This, assuming they can refrain from shooting themselves in the foot, as is their wont. But I see absolutely no hope that the GOP will represent a return to fiscal sanity. Cutting government programs is even less practicable than ending wars. As John Derbyshire is to argue in his soon to be released book: We Are Doomed.

Tuesday, September 08, 2009

Plato's Republic, Book X

Despite the love and respect he has for Homer, Socrates resumes his talk concerning the prohibition of certain types of poetry, for "no one is to be honored or valued more than the truth." So much for the noble lie.

He transitions to a discussion of his theory of forms. As everyone who has studied philosophy knows, there is a rather large, and seemingly unbridgeable chasm, between the world of the mind and the world of the senses. Various philosophers have emphasized one of these worlds, though most strive to unite the disparate realms. For instance, Plato is an idealist, who places a premium on the mind, whereas Aristotle, largely in reaction to his teacher, emphasizes the world of sense.

Socrates argues that to make a bed, the craftsman had to have the form (idea) of the bed in his mind. There are actually three beds, the one "in nature", made by the god, the one which is the work of the carpenter, and the one made by the painter. Moreover, while the carpenter may make many beds of similar quality, and likewise with the painter, the god has no need of replicating an already perfect form. The painter, meanwhile, is an imitator, for his product is the third from the natural one, that is, the perfect form of the god.

The objection which Socrates has to the poet is that he, like the painter with the bed, imitates mere appearance rather than things as they are. He argues that imitation of appearance is far inferior to the production of things as such. Since this is so, anyone who is an imitator can have no knowledge of real things; if he did, he would not waste his time imitating. For instance, a poet who writes about doctors cannot know how to be a doctor, or he would spend his time in doctoring. William Carlos Williams might disagree.

May we uncharitably suggest that Socrates knows nothing about living, seeing as he spent all of his time pestering people with questions? It strikes me as unjust to suggest that all of our time must be spent either in action or in philosophy to be deemed profitable. If memory serves, Socrates himself engages in this dialogue on a return from religious festivities, at which, again, if memory serves, plays were acted.

Moreover, there are those truths which are difficult to convey without recourse to poetry, or, at least, which may be better understood through this medium. In addition, the great poets, including a few contemporaries of Socrates himself, were often those with a very keen grasp of human nature. Dare we claim that Shakespeare was an imitator who knew only the world of appearance?

Returning to the dialogue, "there are three crafts, one that uses it, one that makes it, and one that imitates it." Only the user of the craft has knowledge of the thing he uses. The imitator, meanwhile, is bound to distort the thing he is imitating. Our senses can be unreliable; for instance, they tell us that a stick in water looks crooked. But the best part of our soul, the rational part, knows that this is not true. Likewise, our reason tells us that the poets are mere imitators; the part of our soul which rejoices in imitation must be subordinate to the part which studies things as they actually are. Poets cannot be let into the city because they agitate the people, removing the careful balance between the parts--both of the citizens, as well as that within their souls.

It would be a mistake, however, to think that poets influence the masses only. Decent men may be corrupted by them, too. In praising the unmanly behaviors of the characters of a tragedy, courage in the face of misfortune becomes less esteemed. For this reason, the only poetry allowed will be that which praises the good, in accord with truth.

Socrates notes, almost in passing that the soul is immortal. Glaucon, evidently tiring of being agreeable, makes him attempt to prove it. Socrates notes that "bad is what destroys and corrupts, and the good is what preserves and benefits." We should thus seek out a thing which "has an evil that makes it bad but isn't able to disintegrate and destroy it"; for then we have found something incapable of destruction. But the evils which attack the soul, cowardice and the like, clearly do not destroy it. Injustice, for instance, never kills souls by itself, though the unjust man may be killed in body by others.

While as a Christian I agree with Socrates about the immortality of the soul, I remain unmoved by his argument. If he prefers this line of argument, I'd like some way of knowing how we'd tell if a soul were dead, assuming such a thing is possible. Since God is the only necessary being, He alone is necessarily immortal, though it seems that, for reasons that would take us into the realm of theology, He suffices to imbue souls with being incessantly, rendering them, for all intensive purposes, undying. In any event, if St. Thomas or another has proven the immortality of the soul from reason alone, the proof has failed to penetrate my sometimes thick skull.

Returning to the Republic, we must forsake the study of the soul in the prison of the body and use philosophy to truly study it. (This is one of the points in which Aristotle and St. Thomas break with Plato. For the latter, faith in the resurrection of the body required a reinterpretation of its relation to the soul.)

Socrates returns to the theme of justice to determine how the unjust and the just will be in relation to the gods. They will love the just and hate the unjust. Even when it seems as if the just suffer, like Job, the gods have a plan, which will become clear in the end; in the long run, the unjust cannot triumph. Again, while I cannot follow the reasoning of Socrates completely, ultimately, I agree with him. At the very least, in this fallen world, what sweet consolation to believe that good will eventually triumph. Though I will add that it does no good if such consolation only amounts to self-deception.

Our philosopher then recounts the story of Er. He dies, but is revived twelve days later, allowing him to describe the abode of the deceased. Regarding the dead: "For each in turn of the unjust things they had done and for each in turn of the people they had wronged, they paid the penalty ten times over, once in every century of their journey... But if they had done good deeds and had become just and pious, they were rewarded according to the same scale." Those sufficiently evil were condemned to pay back their wrong for eternity.

Er goes on a journey, and sees a complicated collection of spinning and lit whorls, reminiscent, perhaps, of the Paradiso. The Fates, daughter of Necessity, command the souls to choose a life from a panoply before them. Socrates counsels: "And we must always know how to choose the mean in such lives, and how to avoid either of the extremes, as far as possible, both in this life and in all those beyond it. This is the way that a human being becomes happiest." May it be so for us.

Here ends the Republic. My thanks to those who participated, especially PJ.

Monday, August 31, 2009

Plato's Republic, Book IX

Book IX contains a description of the tyrannical man, and three arguments that he will be the least happy of men. Plato/Soc then proceeds to extrapolate from these results to make a case for paternalistism.

In order to characterize the tyrannical man, Plato/Soc introduces a distinction between lawful and lawless desires. Lawless desires are present in everyone, as is evident in the disordered state of even the best people's dreams. The tyrant is the man in whom the lawless desires reign supreme; he does not use reason to organize his life in accordance with the good. This is to say that he is constantly indulging in "feasts, revelries, luxuries, girlfriends, and all that sort of thing" (573d). He shrugs off responsibilities and steals whatever he needs to feed his various appetites.

As his first proof that a tyrant is the most unhappy of men, Plato/Soc argues that such a man should be described as a slave to base and arbitrary desires, to the part of him least human. Furthermore, even when such a man wins political control, he is so hated that in order to protect himself he must pander to the ugliest sorts of people in order to protect himself from the others whom he subjects to continuous abuse. He debases himself and lives in constant fear of his underlings, who he knows would like to see him dead.

The second proof draws on the earlier distinction between the three parts of the soul. Each part, it is now added, acquires from its object a distinctive sort of pleasure. Depending upon which part of the soul holds sway, a person will be profit-loving, honor-loving, or wisdom-loving, and will judge objects accordingly. These pleasures are arranged hierarchically, each more comprehensive than the last. The argument, then, is that the philosopher understands the pleasures of tyranny and can weigh them correctly, but the tyrant does not understand the pleasures of philosophy and uses the wrong standard when he tries to judge them. So if philosophers report themselves as most happy, we are compelled to take their word for it.

The third proof incorporates an additional premise to the second argument in order to get a similar, but more ontologically substantive result. The new premise is that pleasure and pain are always relative one to the other; to give a crude example, intense pain in your past might make pleasurable for you an experience that is painfully boring to someone of a more sheltered upbringing. Hence all of the pleasures have their place on a single continuum and can, at least in principle, be quantitatively assessed, one against the other. We are said to be most pleased by what most fills us as the kind of being that we are, i.e., rational beings. Knowledge of what is is eternal provides a far more substantial pleasure than profit or honor, which pass away and must be continually renewed. These things have more being, Plato claims, and so the pleasures they afford are more truly pleasurable. The majority of people, unacquainted with the forms, live at the low end of the pleasure scale and have a consequently distorted experience of the world. In fact, with the aid of some screwball math, Plato/Soc. is able to inform us that the tyrant lives 729 times less pleasantly than the king. (My translator, for what it's worth, contends that Plato fudges the numbers and that, really, the tyrant lives only 125 times less pleasantly.)

Yet, we must remember, even philosophers must attend to the lower parts of the soul. The appetitive and spirited parts of the soul are to be ruled, not replaced, by the rational part. Furthermore, it needs to be emphasized that rational pleasures, for philosophers, are not simply tacked onto the other kinds of pleasures enjoyed just as much by non-philosophers. Philosophers are able to most effectively direct their lower desires in order to maximize pleasure afforded and to avoid frustration or excess. Disordered desires, as we've seen, lead to unhappiness.

From this, Plato/Soc extrapolates an argument for a strongly paternalistic form of government:

"Therefore, to insure that someone like that [i.e., like those irrational people who are slave to their appetites] is ruled by something similar to what rules the best person, we say that he ought to be the slave of that best person who has a divine ruler within himself. It isn't to harm the slave that we say he must be ruled, which is what Thrasymachus thought to be true of all subjects, but because it is better for everyone to be ruled by divine reason, preferably within himself and his own, otherwise imposed from without, so that as far as possible all will be alike and friends, governed by the same thing." (590c-d).

I've a few questions still to respond to from the previous Book. I'll get to them as soon as I can. Sorry about the delay!

Cheers, PJ

Sunday, August 30, 2009

Resisting the Totalitarian Temptation

Even after a second read, Liberal Fascism is almost as difficult to evaluate as the term fascism is to define. Parts of the book are quite excellent. For instance, Jonah Goldberg is generally successful in proving that Italian Fascism is a phenomenon of the left. His chapters on Wilson and Roosevelt are not only quite engaging; they are also persuasive. Still, the book possesses a number of flaws. It was a mistake to approach the subject both chronologically and thematically: the result is a good deal of repetition.

In the introduction, George Orwell laments: “The word Fascism has now no meaning except in so far as it signifies 'something not desirable'.” (p.4) In modern discourse, this often means anyone who is not sufficiently progressive. This is a tendency Liberal Fascism seeks to rectify. To an extent, Goldberg avoids slinging around the term Fascism as a generic pejorative. However, he has the annoying habit of pointing out insignificant coincidences between fascists of yore and modern liberals. This not only detracts from his more substantial arguments, it also ensures that almost everyone fits under the ever-expanding definition of fascism.

One gets the impression, then, that Goldberg is confused about his subject. Granted that fascism is a bit nebulous, one would hope that the writer of a book on the matter would be able to use the term correctly—or at least consistently. He gives the following definition: “Fascism is a religion of the state. It assumes the organic unity of the body politics and longs for a national leader attuned to the will of the people. It is totalitarian in that it views everything as political and holds that any action by the state is justified to achieve the common good.” (p. 23)

Proceeding with his definition, it is unclear how a number of the examples Goldberg cites can be construed as fascistic. While the students in Dead Poets Society may invite parallels to a militarized culture (pp. 373-4), they cannot be seen as fascists since the State nowhere enters into the picture. Likewise in V For Vendetta, “The villains and the hero alike are all fascists.” (p. 375) In what manner dismantling a totalitarian regime is fascistic I leave for the exasperated reader to decide.

The book ends by urging conservatives not to avoid adopting a religious significance about the State. This is a laudable endeavor, but it would have been more successful had Goldberg presented a clearer alternative to fascistic government. He explains that “if libertarianism could account for children and foreign policy, it would be the ideal political philosophy.” (p. 344) However, since political philosophy deals with imperfect man, flaws will be inherent in any system. But this is no reason to dismiss libertarianism. After all, it is difficult to see another group in America which better recognizes that there is a realm outside the State, and which is, therefore, better suited to resist the temptations of totalitarianism.

There are, it is true, extensive references to “classical liberalism”, usually in the context of explaining how it differs from progressivism. He notes that conservatism “is the conviction that a properly ordered republic has a government of limited ambition.” (p.402) But I have trouble remembering the last time conservatism thought such a thing. Although they are not fascistic, the wars in Afghanistan and Iraq—which Goldberg supports—are hardly indicative of “limited ambition.”

Blemishes aside, Liberal Fascism provides a good history of the Left. It is now time for conservatives to begin the introspection Liberal Fascism insisted that liberals take. Justin Raimondo's Reclaiming the American Right provides a good place to start.

Thursday, August 20, 2009

Wisdom and Innocence (and Charity, and Truth, and...)

There is a bumper sticker that reads: God, please save me from your followers. Just as the disciples of the Deity often present the most considerable obstacle to knowing Him, a like argument can may be made for the earnest devotees of Gilbert Kieth Chesterton. This is most unfortunate, since we merely aim to be grateful to one who has offered us spiritual strength, and may have even led us to God. To his fans, Chesterton is a brilliant writer whose (almost) every line demonstrates his profundity. We discover that he had an epigram for everything: one which conveys an essential truth in a way that is always witty and seldom inconsiderate. We laugh at his jokes and groan at his puns, and we are always edified. As Pearce's writing attests, if we try to write, we betray the master's influence, what with our semi-colons, alliteration, and attempted paradoxes.

But it would be a mistake to allow poor imitation to ruin one of "the giants of twentieth-century literature". The most obvious place to begin a study of such a giant is with the man's own books; I would recommend The Everlasting Man. But another splendid place to start is Joseph Pearce's well-written and thoroughly researched biography, Wisdom and Innocence: A Life of GK Chesterton. Pearce maintains a good balance between telling the tale of Chesterton and providing selections from his writings—poetry, essays, books, novels—which are integral to understanding the man, and which greatly increase one's admiration of him. As might be expected from Pearce, who has since penned a number of similar works on Catholic literary figures, focus is placed on Chesterton's relationships with members of the literary world. Much is made, for instance, of his friendships with Hilaire Belloc and Fr. Ronald Knox, but also of those with George Bernard Shaw and H. G. Wells, with whom he frequently disagreed. We also learn about the ways in which C.S. Lewis, Evelyn Waugh, Dorothy Sayers, and George Orwell—among others—were influenced by him.

The charity with which Chesterton conducted himself, even while arguing, is not only the primary reason he was capable of maintaining friendships with so many different personalities, it is a major attraction of his writings today. He also gives the Faith an intellectual respectability of which his fellow Catholics ought to be aware, but which its opponents rarely fathom. To Shaw, for instance, Chesterton was not simply a delightful companion; he was also a worthy opponent.

Pearce readily demonstrates Chestertonian charity towards his subject, to the point where we might suspect that he is overly reluctant to criticize him. He nonetheless pronounces against a book if he believes it was written poorly, or against a point if he believes it was wrongly made. For instance, when speaking of The Resurrection of Rome "The prose wanders off in all directions, following endless theological or historical tangents"; and Four Faultless Felons was "completely forgettable and not worthy of the author." After letting Shaw and Chesterton argue it out over the pacifism of the former, Pearce concedes that: "With the wisdom of hindsight it is difficult to side with Chesterton against Shaw on the issue of the First World War."

One is left to conclude that Chesterton is criticized so infrequently because he rarely deserves more than his self-deprecating wit already provided. Often, he deserved much less. We find ourselves siding with Etienne Gilson: "Chesterton was one of the deepest thinkers who ever existed; he was deep because he was right; and he could not help being right; but he could not either help being modest and charitable."

It is difficult to say which offers the greater appeal: his depth of thought or his charity towards others. Thankfully, we need not choose: Chesterton's large frame left ample room for both. In a world that has forgotten both how to think and how to love, Pearce offers welcome insight into a man who could do much to help us remember.

Monday, August 17, 2009

Plato's Republic, Book VIII

Book VIII starts with a useful summary of the Republic Socrates has envisioned: wives are to be held in common, children should be educated in common, and all citizens must hold a common way of life. Also, the kings are to be "those among them who have proved to be the best, both in philosophy and in warfare". Since I have been reading Liberal Fascism, I note here that Socrates has envisioned a proto-fascist State. The term totalitarian, now almost exclusively pejorative, was coined by Mussolini to describe his own regime, that is, a society in which every citizen had his place and no one existed outside the state The term also applies rather well to the Republic. I mention this again because, while Socrates does an admirable job outlining the problems inherent in other constitutions, we should not allow ourselves to the implicit tyranny in his supposed aristocracy.

Socrates then returns to his discussion of the four types of constitution, which he had mentioned in an earlier book. These are: timocracy or Spartan, praised by most and elsewhere described as "victory and honor-loving"; oligarchy, filled with a host of evils; democracy, antagonistic to oligarchy; and genuine tyranny. To this we add the already discussed aristocracy, "which is rightly said to be good and just." He then proceeds to examine the constitutions and the type of people they are likely to produce.

But first he offers an explanation as to how aristocracy decays into timocracy. Inferior babies are born of the guardians; these cleave toward "money-making and the acquisition of land, houses, gold, and silver" while the aristocracy continues to pursue the old, honorable ways. As when Thomas Cromwell looted the monasteries and scattered the wealth among the nobles, the inferior types set about destroying the old older, erecting a new constitution in its stead. This new constitution is halfway between the aristocracy and oligarchy: timocracy, which spends its time making war. (Here the historical parallel to the English Reformation breaks down, though it is instructive to a point.) The timocratic citizen is eager for honor and victory, but lacks the refinement of a true aristocrat. He is also too fond of money. Socrates also suggests that a timocratic child may become militant if his father is unmanly. I see shades of Hegel's dialectic here, which I invite PJ to expound upon.

Next, oligarchy is examined. Perhaps plutocracy is a better name for it, because it is the rule of the rich. I would argue that our present Government is basically of this type. As a further aside, if my premonition is correct, and if Plato's argument is valid, will we next emerge into a... democracy? Or, because our oligarchy is part democracy, would the next step for us be tyranny? The practical application of Plato's theory is very intriguing.

Anyway, a timocracy easily morphs into an oligarchy as the decadent rich forget the aristocratic traditions and value money above all else. Socrates offers that wealth and virtue are inversely related; extolling the latter deprecates the former. Moreover, we can tell what citizens value by what they practice; or as Jesus Christ might put it, "By their fruits you shall know them."

Socrates suggests that the oligarchs would put laws into place that refuse political office to those who haven't sufficient wealth. In practice, governments have seldom found that necessary. In 2006, for instance, fully half of U.S. Senators were millionaires.

The first fault of the oligarchy is that mere possession of wealth does not necessarily make one fit to rule. The second fault is that there grows a chasm between the oligarchs and the citizenry, until there are effectively two cities. Along this divide forms the next civil war, which will bring us to the next constitution. Further, the oligarchs will not divide labor so that farmers farm, and merchants sell, and so on. Nor will they be able to fight effectively, being afraid, and loving money too much to use mercenaries. But their fear of the mob will also leave them reluctant to use them to fight their battles. Worst of all, there will be citizens so poor that they have no real place in the city, something Socrates's totalitarian city would never tolerate. These will have no choice but to beg for their sustenance. In addition to beggars, there will also be robbers, thieves, and similar evil-doers in an oligarchy.

Socrates hearkens back to his conception of the soul in perfect harmony as the ideal of justice. Every citizen of a non-ideal constitution will have lost this balance in his soul, just as the city itself has lost its balance in the way that its citizens relate to each other.

Democracy is the next constitution to emerge. Eventually the poor have had enough of the oppression under their merchant masters, and unite, like good Marxian proletarians, to overthrow the oligarchy. The best historical parallel here, I think, is the French Revolution, which will also come in handy again when we consider how a democracy becomes a tyranny.

When the poor overthrow the rich, they will have grown to a significant proportion of the population. They will thus decide that the rule of the government should go to whoever has the sanction of the majority: democracy is thus formed. The democrats, being free to do as they please, will be variant. The city will be the most beautiful for this variety; so too will its constitution since democratic citizens may enact whichever legislation they so choose. The drawback is that the rulers will be drawn from the mob: they will lack the refinement of the aristocrats. Still, it is a bit difficult to see why democracy is rated below oligarchy, save that it follows upon it, and that it leads to tyranny. Since I am not a particular fan of democracy, but I recall that PJ is, I invite him to put forth any disagreements he has with Socrates on the subject of democracy.

Socrates briefly examines desires which are necessary and which are unnecessary--though the latter is not held to be at all times harmful. Necessary desires include: "the desire to eat to the point of health", while unnecessary ones include: the desire for sex. Methinks Socrates would have made a good monk, though Xanthippe may have objected. The problem with the democratic man is that he confuses licence for the good. Lacking a proper upbringing, he is unable to restrain himself from seeking to fulfill unnecessary desires.

The democratic man "declares that all pleasures are equal and must be valued equally." This is magnificently said. Ethical concerns have largely been stripped away in many modern American debates. For instance, whatever one thinks of abortion, the dilemma regards the nature of the fetus; it has nothing to do with the woman's choice, which cannot be considered an objective good in itself. Socrates absolutely crushes this one.

He does well in the next paragraph, too. "Sometimes [the democratic citizen] drinks heavily while listening to the flute; at other times he drinks only water and is on a diet; sometimes he goes in for physical training; at other times, he's idle and neglects everything; and sometimes he even occupies himself with what he takes to be philosophy." I don't think variety of means is to be condemned so long as all are ultimately subjected to the pursuit of the good. I'm guessing that the contradictory nature of the tasks undertaken implies that the good being pursued it itself in flux, which would be problematic.

Evolving from democracy, last we have tyranny and the tyrannical man, "the finest constitution and the finest man." (Is Socrates sarcastically mocking lovers of tyranny here, such as Euripides? Otherwise, I'm not sure I follow.) Just as an insatiable appetite for money leads to the decay of the oligarchy, a preponderance of freedom--really license, since freedom requires some measure of law--leads to democracy's demise. Indeed, in the paroxysms of license during the French Revolution, the dictator Robespierre eventually lost his own head, as had other revolutionaries, such as Danton, before him. The democratic revolution eats its own.

When once the mob has run wild, Napoleon--a more effective tyrant than Robespierre--must march in to dismiss them with a whiff of grapeshot, and tyranny is established. "Extreme freedom can't be expected to lead to anything but a change to extreme slavery." A leader emerges who has the ear of the mob, or can at least effectively manipulate it. Tired of freedom, the masses long for the order which only his iron rule can bring. Once in power, "the first thing he does is stir up a war, so that the people will continue to feel the need of a leader." Thus Mussolini invaded Ethiopia, and Hitler Poland.

"But also so that they'll become poor through having to pay war taxes, for that way they'll have to concern themselves with their daily needs and be less likely to plot against him." Here we have a common sense critique of Keynes' theory that you can spend your way out of recession, or that war could somehow be good for the economy. We can forgive him for failing to take into account the Federal Bank, which allows the tyrants to spend as much as they wish, while the people, continually impoverished, remain ignorant as to the means of their impoverishment.

Well done, again, Socrates. All in all an excellent book, certainly my favorite of those covered so far.

Wednesday, August 12, 2009

Plato's Republic, Book VII

Book VII opens with the famous "allegory of the cave," which, it is sometimes forgotten, is intended to illustrate the effect of education (or the lack of it) on our nature. I won't restate the allegory, but just call attention to one of it's central implications. The prisoners -- representing the majority of us, not educated into the higher truths of mathematics and philosophy -- do not perceive that they are confined in a cave from which there might be any reason to escape. Even when the philosopher returns to free them, he will appear crazy, enjoining them to act on a set of norms completely beyond their experience. It would actually be rational, by the only standards to which they have access, to refuse philosophical "help."

This allegory builds on the allegory of the sun found at the end of Book VI. That allegory draws upon a distinction between the intelligible and visible realms. We're asked to make the following analogy (my representation only slightly garbled by blogger formatting constraints):

sight :: understanding


visible things :: intelligible things

We have faculties of sight and of understanding. Just as our faculty of sight and the presence of a visible thing is not sufficient for a successful instance of achieved vision, so our faculty of understanding is not by itself enough to grasp the intelligibility of a thing. In the first case, we need the sun to illuminate the space in which seeing might take place; so too, Plato claims, we require the form of the good in the second. And, just as the sun, besides providing a space of illumination, is itself an object of vision, so we are asked to believe that the good is itself an object in the intelligible realm, available, to those with proper training, for direct contemplation. Unfortunately, Plato doesn't offer much by way of explanation as to what the good is such as to do all of this work. If I have time I'll ask around or look at some secondary literature to find if there's something big I'm missing. Allegory can be helpful pedagogically, or as a heuristic, but it's not in general a sound argumentative technique.

Another implication to which Plato/Soc calls our attention is that education is not a matter of filling in a lack, pouring material into a vacant space in the soul, but is a matter of appropriately directing the rational faculties (518). Without making too much of it, Plato here offers a nice piece of evidence in support of some of his claims about the realm of forms. Reason, he says, is not something learned by practice in the way we acquire the bodily virtues. Hence he is able to dub it a "divine" attribute (518d-519a). If this seems like a plausible description of our rational faculties, then the existence of a more-or-less divine realm of forms accessible to it will also seem, in turn, a bit more plausible than before.

(In an interesting with disanalogy with the case of the sun, Plato/Soc claims that when the philosopher gets the good directly in his sight, only the call of justice will bring him back to the cave of political life. Plato/Soc makes it pretty clear that this is a genuine sacrifice on the part of the philosopher: the best life is one spent alone in contemplation of the good. Later, at 532b, he recurs to this theme, claiming that to view the the sun itself is to reach the "end of the visible" -- nonsense, in my view, if "end" here is a translation of "telos".)

The next issue to be considered, and which will occupy the remainder of this book, is the kind of education most conducive to the production of philosopher-kings in contact with the good. The program, in outline, is an initial education in music and poetry, physical training, and basic math, followed by a few years of compulsory physical training, then (for those successful thusfar) ten years of math, five years in dialectic, and (for those still in the program) fifteen years in practical politics. (That's about 35 years, in all -- and this from a time of comparatively low life-expectancy.)

I find a lot of this discussion to be of rather limited philosophical interest, arguing for a certain implementation of his program from sometimes arbitrary pragmatic considerations. The role assigned to mathematics, however, certainly bears comment, along with a few other remarks made in passing.

True philosophy is said to turn the soul "from a day that is a kind of night to the true day," which will involve an ascent from the realm of becoming to the realm of what truly is (521c-d). (This being-becoming opposition appears again at 526e with similar a valuation.) It is mathematics that will emerge as the next step in this education. Distinguishing numbers and calculating is said to be a subject touching all crafts (522c). Both a basic grasp of number and arithmetic and then, in a separate discussion, geometry are defended as relevant both for the art of war and for practicing philosophy. (The discussion of number and philosophy includes a fascinating foray into the metaphysics of perception, but I'm going to pass over this as tangental to our main interests in the text.) They are valuable in war for logistical reasons, and valuable to philosophy because they turn the soul toward unchangeable realities (numbers, shapes) beneath our world of appearances.

The subject of the dialogue changes somehow (under the influence of the sun analogy?) to astronomy, and it is established that the proper emphasis of astronomy is not on the celestial bodies themselves, but on the harmonies and ratios that their motions exhibit.

The next subject for our philosopher-kings-in-training is dialectic. Dialectic is that through which, apart from all sense perception, one attempts to find "the being itself of each thing" (532a). In contrast to mathematics, which begins with agreed upon hypotheses and moves toward conclusions, dialectic works toward establishing first principles (533b). It is essentially the art of philosophical argumentation, and is said to be that by which we progress to the good itself (532a-b). One properly trained in dialectic "can distinguish in an account the form of the good from everything else, can survive all refutation, as if in a battle, striving to judge things not in accordance with opinion but in accordance with being, and can come through all this with his account still intact" (534b-c).

A final suggestion, to close this book, that "the quickest and easiest way for the city and constitution we've discussed to be established" is to "send everyone in the city who is over ten years old into the country[....then] take possession of the children, who are now free from the ethos of their parents, and bring them up in [our] own customs and laws" (540e-541a). All for the greater good!


Thursday, July 30, 2009

Plato's Republic, Book VI

Socrates continues his line of thought regarding philosopher-kings. The guardians will simply have to be philosophers, "those who know each thing that is and who are not inferior to the others, either in experience or in any other part of virtue." But first, Socrates wants to demonstrate that both qualities are possible.

Proceeding along, we come across a famous definition of the philosopher: "a lover of wisdom." Socrates also remarks that such a thinker would not "consider human life to be something important." Subsequent remarks make it clear that the idea is that the philosopher will thus be courageous, and not afraid of death. But I wonder whether or not such disregard for one's own life may lead to disregard for others. One thinks of Paul Johnson's essay on Shelley titled "The Heartlessness of Ideas" in his book Intellectuals. As we have previously noted, the Republic seems to give little regard for the rights of the individual.

Moreover, the philosopher should be "good at remembering, quick to learn, high-minded, graceful [in thought], and a friend and relative of truth, justice, courage, and moderation."

Adeimantus interjects that philosophy doesn't always produce the types of men that Socrates claims. Many would observe that of philosophers, "the greatest number become cranks, not to say completely vicious, while those who seem completely decent are rendered useless to the city." I wonder if our resident philosopher will take these words in stride.

Socrates points out that the lack of honor accorded to philosophers by the cities is not a reflection upon the former. The true philosopher cannot be blamed if his fellow citizens condemn him as useless when they should be coming to him for advice.

Admitting that the great number of philosophers are, in fact, vicious, Socrates then proceeds to show why this isn't a slight on philosophy. His dismissal here is essentially the no true Scotsman fallacy. Since philosophers love that which is true and good, those who are not so cannot be philosophers. Yet even if Socrates' tautological definition is accepted, it seems to me that a seeker of truth could still be unjust and courageous, so long as he were truly striving to be true and making general moral progress. Surely one does not become a true philosopher only when one becomes a true saint.

Having expunged the bulk of humanity from the camp of the complete philosophers, Socrates examines the ways in which one who seems fit for philosophy may be corrupted. He points out that the better a nature is, the more potential it has for corruption, and hence the worse it may become; paradoxically, the very good things which a man has will be those whereby he is corrupted. Some of this anticipates the Christian idea--which was borrowed, if memory serves, from Plotinus, who was of course a follower of Plato--of evil as a privation, rather than a positive entity. And Socrates's point about corruptibility is used by C. S. Lewis in The Screwtape Letters, where Screwtape laments the pitiful quality of souls who entered Hell during the age of modernity.

Railing against the Sophists, Socrates places especial blame on the practice of punishing one who isn't persuaded by their empty words. We must ask ourselves what is objectionable here: the methods or merely the truth taught. One wonders whether pupils will be allowed to disagree with the teachers in Socrates's city.

After a little more railing on his eternal enemies, he throws up his hands against the folly of the mob. The majority will never love beauty; hence they can never be philosophers. And even if someone is wise, and just, and the like, the praise of the masses, or at least those close to him--here Socrates seems to contradict himself severely, even as he gives proof to his earlier paradox--will ensure he never sets down the hard road of actually learning philosophy.

He offers another complaint: philosophical training is gone about precisely the wrong way. Instead of completing one's training in philosophy while young, one should prepare one's mind early, only becoming a true philosopher after years of hard work. This strikes me as sensible advice.

Then, seeming to reverse his earlier opinion, Socrates notes that if only so-called philosophers were better men--or if people did not incorrectly identify false philosophers as representatives of the class--that true philosophers would be thought better of. And here I thought we were allowed to disdain the masses. Perhaps some other time.

After a long diversion, Socrates gets back into the discussion of constitutions. He insists that a philosopher would never deign to rule unless he were allowed to wipe the legal slate clean. And he wonders why people don't trust philosophers. As a thought exercise, writing a constitution is a decent idea; but, in practice, overthrowing the entire legal edifice is never a good idea. Once that precedent has been established, the law no longer has any permanent basis and degenerates into the whims of the rulers. Sooner or later, it becomes time for the enemies of "the people" to meet the guillotine. On a more relevant note: didn't Socrates insist he would have no need to legislate so long as he could control the educational establishment? And now he wants to come up with all the laws. Slippery fellow, that Socrates.

After a brief diversion, Socrates returns to the guardians, who, in addition to all that has been discussed previously, i.e. the extensive physical training, must also find time for book learnin', to put it colloquially. Most importantly, one must attain knowledge of the good, which, to Socrates, is even more important than possession of the virtues, justice included. Rather than enter into a discussion about what the good is, which would take a considerable while, Socrates promises to pay that debt some other time.

Without giving a definition of the good, he does claim, however: "What the good itself is in the intelligible realm, in relation to understanding and intelligible things, the sun is in the visible realm, in relation to sight and visible things." In other words, goodness is what allows the one knowing to know things; at the same time it allows the things themselves to be known. Socrates also makes a distinction between knowledge and truth, which are both "beautiful things", and goodness, which is even more beautiful. In fact, all being is dependent on goodness, but, unlike for St.Thomas, it is also separate from it.

Socrates offers some words on his theory of forms: "[Students of geometry, etc.] make their claim for the sake of the square itself [that is, the ideal form], and the diagonal itself, not the diagonal they draw, and similarly with the others. These figures that they make and draw, of which shadows and reflections in water are images, they now in turn use as images, in seeking to see those others themselves that one cannot see except by means of thought." In order to reach the highest condition of the soul, that of understanding, we cannot rest content with knowledge of appearances: we must seek out knowledge of these ideal forms.

Monday, July 27, 2009

On socialized health care

I'll try to get to Book VI of the Republic either tomorrow or Wednesday. In the meantime, a few words, if I may, on the subject of socialized health care. The problem with this debate, as with so many in politics today, is that one who believes in free markets can get caught trying to defend the status quo, which is, almost always, an awful amalgam between government bureaucracy with a bare semblance of free exchange. But it would be a mistake to do so. The present system is bad, everyone knows it, and anyone who stoops to say a word in its favor will only raise suspicions about his credibility.

The simple fact of the matter is that health care would look radically different in a free society. Most purchases, for routine checkups and the like, would be made with cash; there is no reason to involve insurance companies over ordinary and foreseeable circumstances. Insurance could be purchased to guard against unlikely, but catastrophic, events. It is also possible that payment plans could be made with the provider of medical care; there is no need for the doctor to receive all of his money up front if he doesn't demand it.

Such checkups could take place anywhere, and those conducting such would not need to be licensed by the State. Since the State limits the number of doctors licensed in a given year, this artificially limits supply. This results in shortages and higher prices for medical care. Even though this can be easily gleaned from a study of basic economics, it is amusing to consider how often politicians make policies which can only result in the opposite of what they intend--and then act surprised when mere whim cannot override economic law.

Now, Obama and company are insisting that socialized health care will be a boon to everyone. We know this isn't the case, since Government programs always pick winners and losers. Nonetheless, it is not always easy to for tell who the winners and losers will be. It is not always the case of the poor benefiting at the expense of the rich--which, though perhaps unjust because of the violence involved in wealth redistribution, would at least give the illusion of appearing to be charitable. For one thing, the rich will always be able to opt out of a socialized system by using their money to purchase services elsewhere, either in other countries or in the black market which always emerges if the State refuses people the right to sell a good for which sufficient demand exists. For another, it is easy to see the poor being stuck in waiting rooms in crowded inner cities; and in severe cases the long waits may even prove fatal. In any event, at the very least the employees of the State will benefit since they will be paid with money which is extorted from the citizens.

Back to the point, it is again discernible from an appreciation of the laws of economics that subsidizing a good--that is, allowing a good to be purchased for a cheaper price than would otherwise exist on the free market--increases demand for that good. In his book Ten Things You Can't Say in America--which, by the way, was my first serious encounter with libertarian thought--Larry Elder uses the example of heat in an apartment complex. So long as he paid for the heat he used, Elder was careful to only use that which he needed. But when the landlord lumped heat in with the cost of rent, it no longer made sense to come home to a freezing apartment to save money. Instead, he kept the heat on all winter. The costs of the good were being paid for in large measure by his neighbors. This is very close to the system we have now with health care, and this will only be compounded with a socialized system.

Now, we can argue that Elder should have been a better person and willingly avoided using his heat except when it was necessary. But it is absurd to expect that he, or anyone else, would really do this. Perhaps a few ascetic saints would conserve heat; but the majority of us would be liberal with our usage because there is no real incentive to be stingy. It is foolish therefore, to lament that men are not angels, only to turn around and erect a scheme in which mild deviltry is encouraged.

Most of my argument, to this point, has been essentially utilitarian: Government run health care will provide a less valuable product at a higher cost. But it is still possible that we would prefer such a system if we believed that health care was a human right. In a certain sense, this is a better argument because it recognizes that making a case that the State will, for the first time in recorded history, do something efficiently, is not a very strong one. This is especially true when the "reform" bill is over one thousand pages long. It's not good to try to emulate the Vogons.

There is one problem with this line of argument however, and that is that health care is not and cannot be considered a right. It might be desirable for all to have health care, but the most we can do is insist on a right to life. That those pushing for a right to health care also maintain a "right" to abortion, which violates the real right to life which all humans--born and unborn--possess, is but another of life's tragic ironies--but I digress.

My argument can be made clear in two ways. First, a right must exist in all times and at all places. We cannot, for instance, insist that man has a right to Internet access for the simple reason that Internet was not available for the majority of human history. We would then be forced to argue that our rights to a future undiscovered good were presently being violated, which sounds like something the Red Queen might say. Health care is analogous to the Internet: it is the product, not only of technological advances but, even more so, of the capitalist system which provides a means whereby goods and services can be allocated ever more easily to a growing mass of people. It is good that it now exists in some measure, but it can be no more considered a right than can the toaster. A good standard is that if Robinson Crusoe could not claim it as a right, it cannot be treated as one.

Again, if health care is right, we must ask how we are not to violate it. Put thus, it seems a peculiar question, but this is only because health care is not, in fact, a right. If we ask the question of life, it becomes more clear. We honor a man's right to life, at the most basic level, by not killing him. But how are we to honor his right to health care? Must we be forced to do all that we can for our neighbors? Charity demands that we give both of ourselves and our possessions for the good of others, but if a doctor goes home to bed rather than treat his thirtieth patient of the day, he cannot be said to be violating his neighbor's right to health care. As cogent an argument could be made that his patents are violating his right by compelling him to go short on his sleep. But where on earth, then, are we to draw the line? Plainly, health care is not a right.

Libertarians, and especially Christian ones, need to be careful that in their haste to make a case for a free market solution, they not only avoid sounding too callous, but also make clear that they are acting in the best interest of all humanity. This can be difficult; it is certainly something I rarely, if ever, succeed in doing, and I don't think I have done so here. In expiation, I offer this final thought. When something becomes a right, and when this right is enforced by State force, we no longer receive the benefits that accrue both to recipient and donor when the latter gives charitably to the former. Pope Benedict XVI is significantly to the left of me economically, and--it must be said in fairness--far more in line with traditional Catholic social teaching, but for this reason his point bear especial attention. Taken from his first encyclical, Deus Charitas Est (28.b), I give him the last word:

There is no ordering of the State so just that it can eliminate the need for a service of love... The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person—every person—needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need... In the end, the claim that just social structures would make works of charity superfluous masks a materialist conception of man: the mistaken notion that man can live “by bread alone” (Mt 4:4; cf. Dt 8:3)—a conviction that demeans man and ultimately disregards all that is specifically human.